U.S. and China May Build Managed Trade Mechanism for Non-Sensitive Goods

The United States and China are expected this week to move toward creating a managed trade mechanism for non-sensitive goods. The two sides may each identify about $30 billion worth of products for tariff reductions and reciprocal sales, while avoiding areas that touch national security red lines. According to Reuters, the proposed “Board of Trade” was first raised in March by U.S. Trade Representative Jamieson Greer. It is being viewed as a possible concrete outcome from a high-stakes summit between U.S. President Donald Trump and Chinese President Xi Jinping. Details of the plan remain unclear, but one major shift from previous talks is evident: Washington is no longer demanding that Beijing change its state-led, export-oriented economic model into a more consumer-driven, market-oriented system like that of the United States. Instead, the effort would focus on trade-value targets in non-strategic industries, while maintaining broad tariffs and export controls on technologies deemed sensitive to national security. Greer said last week that the United States is not asking China to change how it governs or manages its economy, since those practices are deeply embedded in its system. He said the two countries could still find ways to optimize trade and make the relationship more balanced. He likened the mechanism to a plug adapter that helps connect two otherwise incompatible economic systems. Sources familiar with the Trump administration’s goals said officials expect to start the mechanism with a framework involving $30 billion in trade barrier reductions on each side. It remains unclear whether Trump and Xi will define specific product categories at their meeting or leave the details to later talks. Wendy Cutler, a former U.S. trade negotiator and vice president at the Asia Society Policy Institute, said the two sides are gradually building consensus around a basket of roughly $30 billion to $50 billion in goods for tariff or other trade-barrier reductions. She said the mechanism may begin with this relatively small share of overall U.S.-China trade and expand over time. U.S. Census Bureau data show that bilateral goods trade between the two countries fell 29%, from $582 billion in 2024 to $415 billion. The U.S. trade deficit with China dropped nearly 32% in 2025 to $202 billion, the lowest level in two decades. China still maintains a broad 10% tariff on all U.S. imports, along with retaliatory duties on goods including crude oil, liquefied natural gas, coal and beef. The United States continues to impose 7.5% tariffs on a range of Chinese consumer products, as well as an additional temporary 10% global tariff. Washington may also restore some product-specific tariff exclusions that were approved during Trump’s first term but have since mostly expired.